Customs and Anti-Dumping Duties in the Import of Machinery and Medical Technology

When and how you can lawfully pass on additional costs to your customers

1. The Legal Framework: Contractual Obligation, Adjustment, and Exemption

The starting point is the concluded contract. A fixed price is initially binding, since by agreeing to such a price the seller usually assumes the contractual risk of unforeseeable cost increases. Subsequent additional import costs, including customs duties and anti-dumping duties, typically fall within the seller’s procurement and expenditure risk unless the parties have agreed otherwise.

However, this does not mean that passing on the costs is always excluded. German civil law recognizes two corrective mechanisms:

• Price adjustments based on valid escalation clauses, and
• Statutory adjustment due to frustration of the basis of the contract (§ 313 BGB).

Only in rare exceptional cases does the duty of performance cease, wholly or in part, due to impossibility (§ 275 BGB) or, in international trade, due to force-majeure-like circumstances under Article 79 CISG. These thresholds are very high and are usually not met by mere cost increases. In practice, the path to a legally secure cost transfer therefore lies mainly through well-drafted price adjustment clauses, or subsidiarily through § 313 BGB.

2. Price Adjustment Clauses as the Key Instrument in B2B Transactions

In business-to-business dealings, price adjustment clauses are permissible if they are transparent, based on real cost triggers, and not intended to increase profit margins retroactively.

Transparency requires that clauses clearly state which state-induced costs – especially customs and anti-dumping duties – justify an increase and how this increase will be calculated. Typical formulations refer to "customs duties, import levies, and trade defense measures including anti-dumping and countervailing duties imposed after conclusion of the contract," with adjustments limited to the "actual and specific additional burden."

In practice, it is advisable to exclude any contractual obligation on the seller to switch procurement sources or manufacturers benefiting from anti-dumping measures, since this would create significant effort and disrupt supply chains.

VAT sliding clauses, including import VAT, are common because they do not burden the buyer due to the possibility of input tax deduction under § 15 UStG.

AGB (General Terms and Conditions) Control:
Most supply contracts qualify as AGB under German law because contract templates intended for repeated use fall under this category. This means that even in B2B transactions, clauses must withstand statutory control regarding transparency and fairness.

An alternative technique is a contractual right of price determination under §§ 315 et seq. BGB. This allows one party or a third party to set the price later, subject to the principle of reasonableness and judicial review.

3. If Clauses Are Missing: Adjustment under § 313 BGB

Where no valid price adjustment clause exists, § 313 BGB serves as a legal fallback. It applies only if:

1. There is a significant, unforeseeable change in circumstances after contract formation,
2. The change is not attributable to contractual risk assumed by a party, and
3. Maintaining the contract unchanged would be intolerable.

Mere cost increases normally fall within the seller’s risk. § 313 BGB only becomes relevant in extreme cases, such as drastic trade measures that fundamentally disrupt the calculation basis.

Documentation is crucial: the introduction date and rate of duties, impact on margins, alternatives considered, and associated costs must all be recorded. Predictable developments argue against § 313, while unforeseeable, sudden, and severe measures may justify it.

4. Why Economic Impossibility and Force Majeure Rarely Help

There is a temptation to classify steeply rising levies as “economic impossibility.” However, case law has largely abandoned this approach in favor of § 313 BGB. Only genuine impossibility, where procurement or performance objectively fails, can justify § 275 BGB. Mere cost increases, even dramatic ones, are insufficient.

Similarly, Article 79 CISG exempts performance only if unforeseeable and unavoidable impediments beyond the party’s control exist. Pure price increases do not qualify unless they reach extreme levels. Parties invoking force majeure must first exhaust reasonable alternatives, including more expensive substitute procurement.

5. Typical Contract Types and Their Implications

• Framework supply agreements with recurring deliveries: Price adjustment clauses are both justified and permissible, provided they are transparent and tied to external, state-determined costs.
• Project-based fixed-price contracts (e.g., for delivery and installation of imaging systems): Typically lack any price flexibility. Here, § 313 BGB is often the only potential remedy if anti-dumping duties are imposed afterwards.

6. Case Example: A 25% Anti-Dumping Duty on a Core Component

If a manufacturer imports an endoscopic core component that suddenly becomes subject to a 25% anti-dumping duty, the consequences depend on the contract:

• With a price adjustment clause explicitly covering such duties, the seller may increase the price proportionally to the additional burden, supported by customs documents.
• Without such a clause, § 313 BGB might apply if the change was sudden, unforeseeable, and substantial. However, the adjustment is limited to restoring contractual balance, not creating new margins.

7. Countering Common Objections

Even where contracts contain force majeure provisions, mere cost increases rarely suffice. Courts expect sellers to have attempted reasonable substitute sourcing before invoking force majeure. This makes such clauses largely unsuitable for passing on customs or anti-dumping costs.

8. Drafting Guidance for Future Contracts

Reliable protection requires careful drafting. Effective clauses should include:

1. Triggers: Customs duties, anti-dumping and countervailing duties, trade defense measures, or similar sovereign interventions.
2. Mechanism: Adjustment limited to the actual additional burden, supported by evidence.
3. Balance safeguards: Downward adjustments if duties lapse, and termination rights if resale by the buyer becomes substantially impaired.

It is also advisable to clarify that sellers are not obliged to restructure supply chains solely to maintain original prices.

Where open pricing is desirable, a well-formulated price determination right under § 315 BGB can provide flexibility, though its exercise is subject to judicial scrutiny.

9. Recommendations for Ongoing Contracts

For contracts already in force, a structured approach is recommended:

• Review wording of price clauses, adjustment provisions, and force majeure terms.
• Compile the factual basis: legal measure, date, scope, and financial impact.
• Communicate early with customers, presenting clean calculations limited to actual burdens.
• Where clauses are insufficient, prepare arguments under § 313 BGB (unforeseeability, severity, intolerability, no assumption of risk).

This strengthens negotiation positions and litigation prospects.

10. Conclusion

Customs and anti-dumping duties are not a business destiny that importers must silently bear. They can be passed on legally, primarily if contracts include clear and transparent adjustment clauses or, in open pricing models, rights under §§ 315 et seq. BGB.

If such mechanisms are absent, § 313 BGB offers a fallback in severe, unforeseeable, and unassumed situations. The thresholds, however, are high. Economic impossibility and force majeure provide relief only in rare cases, as mere price increases do not suffice.

Companies that sharpen their contract templates, document carefully, and communicate proactively establish the legal foundation to address state-induced burdens in the supply chain fairly and securely.